Better-than-expected factory output data and contained consumer and wholesale price indices buoyed sentiments and led to BSE Sensex and NSE Nifty jumping 0.61 per cent and 0.39 per cent, respectively, on Monday.
The 30-scrip Sensitive Index (Sensex) gained 161.25 points to close at 26,586.55. It had opened at 26,498.67 and touched an intra-day high and low of 26,728.60 and 26,307.84, respectively. The wider 50-scrip Nifty ended 0.39 per cent, or 31 points, higher at 8,013.90.
Trade was impacted by the release of annual wholesale inflation data, which continued to be in the negative in May. However, it moved up slightly to (-)2.36 per cent from (-)2.65 per cent in April.
Apart from an expected rate of WPI, better-than-expected consumer price index (CPI) and Index of Industrial Production (IIP) figures, released after close of equities markets on Friday, also had an impact on day's trade.
The April IIP showed a 4.1 per cent growth against a 2.1 per cent rise for the previous month. The retail inflation inched-up to 5.01 per cent in May from 4.8 per cent in April.
According to Anand Rathi Financial Services, excess global capacity, a slowdown in the global recovery, lack of domestic demand, and no sharp turnaround in investment capex would keep manufactured goods in deflation. "For the next five-six months we see this downtrend. The bottoming out of fuel inflation also looks some time away, but the impact of firming crude price is already visible. While the broad trend in food inflation is downward (excluding a few items), non-food articles are likely to contribute to primary-article inflation. Overall, the headline figure is likely to continue in deflation at least till August 2015."
Healthy buying took place in the automobile, healthcare and oil and gas stocks. However, consumer durables, metal and power scrip came under selling pressure.
The S&P BSE Auto index rose by 197.86 points, followed by the BSE Healthcare index which gained by 147.72 points and the BSE Oil and Gas index which was up by 81.73 points. The S&P BSE Consumer Durables index declined by 82.54 points, Metal and Power index also fell by 56.72 points and 9.63 per cent, respectively.
Among the Nifty stocks, Cairn India, Sun Pharma, Idea Cellular, Mahindra & Mahindra and HDFC were the top performers with gains of 4.15 per cent, 3.36 per cent, 2.14 per cent, 2.28 per cent and 2.26 per cent, respectively.
However, Power Grid, Bank of Baroda, ACC, Hindalco and Kotak Mahindra Bank declined by 2.96 per cent, 2.48 per cent, 2.22 per cent, 1.84 per cent and 1.82 per cent, respectively, and stood at the bottom of the performance chart.
Reliance Industries also rose over 1 per cent, adding to Friday's 1.44 per cent gains, after the company said it would commercially start 4G services around December, offering a timeline for the launch of a key diversification move that investors have long awaited. Shares of the company closed 1.33 per cent higher at Rs 901.
The markets were also anxious about the US Fed's monetary policy meeting on June 17 which will be closely monitored for any signs of a rise in interest rates. With higher interest rates in the US, Foreign Portfolio Investors are expected to be led away from the emerging markets such as India.
(With Inputs from IANS)